Citizens' Issues
Beach Clean-up: Mumbai's Own 'Coconut Lagoon'
Versova Beach has been going through various transformations. It was one of Mumbai's most littered and dirty beaches but now it has become nothing less than a vacation spot.
Afroz Shah, a lawyer and an “ocean lover”, along with  Versova resident volunteers and many others, cleaned up the beach in a now famous campaign.
He began his mission back in 2015.  Along with his neighbor,  Harbansh Mathur, who died last year, he began disposing of the plastic waste, cement sacks, glass bottles and clothing accumulated at the shores. They removed 5,000 kg of garbage during the first clean up.
The clean up took 85 weeks and a total of almost 5 million kilograms of hazardous waste and plastic trash from the 2.7 kilometre stretch was picked up.  It is the world's largest clean up and is now going through its second make-over as a so-called “coconut lagoon”.
In their 88th week of work, the community planted 300, 10 feet tall, coconut trees on the beach. Afroz Shah says their effort is to restore Versova beach's pristine state of being a coconut tree haven. These trees were later cut and land was reclaimed, and hence its shabby state till recently.
Mr Shah was awarded the UN’s top environmental accolade, Champions of the Earth award, at Cancun, Mexico, for his beach cleaning efforts, making him the first Indian to win the award.
The group plans to plant 200 more coconut trees. Also, after July, they plan on a further mass clean up drive which will be conducted in collaboration with the local residents, the BMC and the United Nations.
"I just hope this is the beginning for coastal communities across India and the world. We have to win the fight against marine dumping and that involves getting our hands dirty. We humans need to reignite our bond with the ocean and we don't have to wait for anybody else to help us do that," said Afroz Shah
Mr Shah vows to continue his beach clean-up project until people and their governments around the world change their approach to producing, using and discarding plastic and other products that wash up onto beaches all over the world.



Silloo Marker

2 weeks ago

Hats off to Mr. Afroze Shah, he has done what he could to save a natural site like a beach and in the process, inspired others to join in. He deserves all the awards that may come his way.


2 weeks ago

This is a wonderful thing. Varsova used to be my favorite beach and I spent many Sunday mornings and evenings with my family, kids and friends. Now a octogenarian, I will visit it once again. Thank you Afroz Shah for cleaning Varsova.

ED attaches 50 kg gold of Tamil Nadu businessman Sekhar Reddy
The Enforcement Directorate (ED) on Tuesday said it has provisionally attached around 50 kg of gold ingots/bars worth over Rs 13,96,88,246 crore of businessman J.Sekhar Reddy and his associates in connection with new-for-old currency notes scam.
The action has been taken under the provisions of Prevention of Money Laundering Act, 2002 (PMLA), the ED said.
In a statement issued here, the ED said following demonetisation, the Income Tax Department searched various places belonging to Reddy, Managing Partner of SRS Mining, and seized about Rs 97 crore in old currency notes, Rs 34 crore in new currency notes and 177 kg of gold bars.
Following that, the Central Bureau of Investigation (CBI) registered an FIR against Reddy and his associates for converting demonetised currencies into new currency notes in a fraudulent manner, the ED said, adding it had also initiated investigations under PMLA against Reddy and others.
According to the ED statement, Rs 10 crore in old currency, Rs 34 crore in new currency, 6.5 kg of gold bullion, and 30 kg of gold seized in its raids has already been attached provisionally.
During the searches, 49.480 kg of gold bars valued at Rs 13,96,88,246 were recovered and seized by the Income Tax offficials from a flat belonging to SRS Mining.
Reddy has stated that cash seized by the Income Tax department belongs to his SRS mining Company and admitted that it was unaccounted money.
"However, he has not divulged the actual source of new currencies other than stating that it is from the sand mining business," the ED said.
According to ED, Reddy and his associates converted a part of such unaccounted monies into gold bars through M. Premkumar, who used to receive money from K.Srinivasulu, an associate of Reddy, for their purchase.
Between November 20 to December 7, 2016, Premkumar purchased about 80 kg gold, using cash provided by various persons on behalf of Srinivasulu.
The purchases were made without bills or vouchers.
According to ED, Srinivasulu has stated that he used to receive money from SRS Mining and used to use a part of the same for converting into gold bars through Premakumar as per the instructions of Reddy.
The ED said the two partners of SRS Mining - Ramachandran and Rethinam - had stated that they used to transport huge amounts of cash by road without any accompanying accounts and neither maintained any accounts against collections, expenses, etc. so as to conceal the illegal earnings from accounted income but had never sought to buy gold bars.
"However they stated that they never instructed to purchase gold bars and this may be on the instructions of Sekhar Reddy only," the ED said.
With the attachment of these gold bars, the total attachments in the case has gone up to about Rs 68.5 crore.
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.




vivek chatterjee

2 weeks ago

Copy paste ..."Rs 13,96,88,246 crore" is this rt amount... every news paper wrote same ...later mentioned 68 Cr.

GST: Providing guarantee to related persons is like stepping on a land mine

Related party transactions always follow the presumption of not being at arm’s length and therefore tax provisions prescribe that such transactions should be undertaken at market value and be based on usual commercial terms, as if done with a third party. Transactions with related parties are always subject to scrutiny and are required to demonstrate that the transactions are driven by commercial understanding.

The Goods and Services Tax (GST) regime also prescribes for definition of related persons and applicability of valuation rules, as prescribed in case of transactions with related persons. This article intends to highlight some of the issues that the GST switchover will bring about in case of guarantee provided by related parties.

Guarantees, as we understand, will always be provided by related persons. To determine a reasonable interpretation here seems a risky proposition in itself! This will lead to varying or disregarding arrangements and value of supply determined by the contracting parties and will open up tax assessments, which may be an unwarranted exercise.

Under the service tax regime as well, there are valuation rules that could be triggered to disregard the value of the service computed by the assesse. However, in case the consideration for a service was zero, then the valuation rules were not triggered to assess a deemed value and therefore no service tax was charged on zero consideration. Under the GST regime, however, there is no question of treating the value of the service as zero and drawing upon valuation rules, therefore it increases the cost of providing guarantee, dissuading companies from giving guarantees.

In case of non-banking finance companies (NBFCs), where there is a service tax levied on the guarantee provided, the loss of input credit is an additional cost to the transaction.

Therefore providing of guarantee as services to related persons seems like stepping on a land mine!

Also if there are transactions in different states, the interpretation could be subject to vagaries of different tax officers.

Section 15 of the Central GST Act states that the value of supply of goods or services shall be considered to be the actual price paid or payable for the purpose of taxation, where the transactions is not between related persons and price is the sole consideration for supply. In case the supply of goods or services is between related persons then the value of such supplies shall be determined by the valuation rules prescribed in this regard.

Who are related persons?
Explanation to Section 15 of the Central GST Act explains that

a. persons shall be deemed to be “related persons” if

(i) such persons are officers or directors of one another’s businesses;
(ii) such persons are legally recognised partners in business;
(iii) such persons are employer and employee;
(iv) any person directly or indirectly owns, controls or holds 25% or more of the outstanding voting stock or shares of both of them;
(v) one of them directly or indirectly controls the other;
(vi) both of them are directly or indirectly controlled by a third person;
(vii) together they directly or indirectly control a third person; or
(viii) they are members of the same family;

b. the term “person” also includes legal persons;
c. persons who are associated in the business of one another in that one is the sole agent or sole distributor or sole concessionaire, howsoever described, of the other, shall be deemed to be related.

Therefore holding and subsidiary, associates, fellow subsidiaries shall be taken to be related persons.

Identifying issues in guarantee transactions
Rule 2 of the Determination of Value of Supply Rules, provides for determining the value of supply of goods and/ or services between distinct or related persons, other than through agent. The rule prescribes that the value of the supply between related persons shall be:

a. the open market value of such supply;
b. where open market value of such supply is not available, it shall be the value of supply of like kind and quality;
c. and where the value cannot be determined by the mechanisms stated in (a) and (b) above, it shall be determined by application of Rule 4 or Rule 5 of the aforesaid rules.

Guarantees provided by holding to a subsidiary or transactions alike between related persons will be considered to be a supply of service for the purpose of GST and usually, there is no guarantee commission charged.  
So in case of guarantees provided by related person, the valuation rules shall apply. Also there is no market for guarantee commissions or service of like nature.

Proviso to Rule 2 states that –

Provided that where goods are intended for further supply as such by the recipient, the value shall, at the option of the supplier, be an amount equivalent to ninety percent of the price charged for the supply of goods of like kind and quality by the recipient to his customer not being a related person:

Provided further that where the recipient is eligible for full input tax credit, the value declared in the invoice shall be deemed to be the open market value of goods or services:

The provisos creates a carve out, a) where there is regular supply of such goods or b) where the recipient is eligible for full input tax credit, the value of the supply shall be based on the invoice value for the purpose of taxability.
In case of guarantee, the relevant proviso is where the recipient is a full input tax credit eligible entity. In case it is not, then one will have to look at Rule 4 and Rule 5 to conclude on the value of supply.

Rule 4 and Rule 5
Rule 4 states that –

Where the value of a supply of goods or services or both is not determinable by any of the preceding rules, the value shall be 110% of the cost of production or manufacture or cost of acquisition of such goods or cost of provision of such services.

In case of guarantees, there cannot be a computation of costs. Therefore, the rule is not relevant.

Rule 5 is the residual method of valuation and states that –

Where the value of supply of goods or services or both cannot be determined under rules 1 to 4, the same shall be determined using reasonable means consistent with the principles and general provisions of section 15 and these rules:

Rule 5 exposes the determination of value of supply to the discretion of the tax officer. The officer can apply any methodology to arrive at the value of guarantee for the purpose of tax.

The definition of related persons and the rationale for valuation is in lines with the World Trade Organisation Customs Valuation Agreement.

The transition into GST is a mega reform in the Indian tax regime and for the corporates to deep dive into the ocean to find the pearls or may be just pennies.

(Nidhi Bothra is executive vice president at Vinod Kothari Consultants Pvt Ltd)


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